PAULINO M. CASTRILLO AND FELICISIMA CASTRILLO, PETITIONERS, VS. THE COURT OF APPEALS, DOROTEO DIMARANAN AND DOLORES MASIPAG DIMARANAN, RESPONDENTS.

This case is before us on appeal by certiorari from the decision of
the Court of Appeals affirming that of the Court of First Instance of
Laguna in Civil Case No. B-29.

The pertinent facts, as found by the appellate court, are as follows:

Lot No. 188 of the Binan (Laguna) Estate Subdivision, with an area
of 590 square meters, was acquired by Crispina Miranda from the
Government in 1917. Transfer certificate of title No. 2068 of the
office of the Register of Deeds for Laguna was issued in her name. In
1924 she executed an affidavit (Exh. A) affirming that the lot was not
hers alone but belonged in common to her and her two sisters, Telesfora
and Isabel Miranda. Isabel had her house on the northern part of the
property; Crispina had hers in the center; and Telesfora, who had no
house, lived alternately with the other two.

In 1929 Crispina sold a portion of the lot, with an area of 85 square meters, to the spouses Aquilino Almoro and Marcela Alzona.

In 1932 Isabel solid her share, with the house erected on it, to Doroteo Dimaranan, respondent here (Exh. B).

In 1934 Crispina executed a document entitled “escritura de venta
absoluta” (Exh. C), stating that she was the owner of lot No. 188 and
selling two portions thereof; one, containing 252 square meters, to
Isabel Miranda for P600.00; and another, containing 86 square meters,
to the spouses Almoro and Alzona for P200.00. According to the trial
court, that document was evidently intended to ratify and confirm
Isabel’s rights and interest as well as the previous sale to the said
spouses.

In 1940 these spouses sold the portion they had purchased from Crispina in 1929 to Jose V. Garcia.

Crispina Miranda died in 1935, but the lot continued to be
registered in her name under transfer certificate of title No. 2068. On
the strength of the conveyance by her to the spouses Almoro and Alzona
and of that by the latter to Jose V. Garcia, the said certificate of
title was cancelled and another one No. 20733 was issued. This was
likewise immediately was cancelled and replaced by certificate No.
20734, issued on December 6, 1940, in the names of Crispina Miranda, as
owner of 505 square meters, and of Jose V. Garcia, as owner of 85
square meters. In 1947 the title was reconstituted administratively and
its number changed to RT-169.

After the death of Jose V. Garcia, or in 1954, his widow and son,
Guadalupe C. de Garcia and Antonio Garcia, executed a deed of
partition, in virtue of which certificate No. RT-169 was cancelled and
replaced with certificate No. .8418, with the same notation of
registered owners as before.

On On April 26, 1955 Doroteo Dimaranan (vendee of Isabel Miranda)
filed a petition in the original registration record praying that Jose
V. Garcia be ordered to surrender RT-169 to the Register of Deeds so
that the same could be cancelled and another one issued, containing the
names of the new owners (including petitioner with respect to the share
acquired by him). The petition was denied by the Court on the grounds:
(a) that the extrajudicial sworn statement of Crispina Miranda (Exh. A)
was not admissible in evidence because “she was still living (sic) and
should have been presented to testify; and (b) that with respect to the
deed of conveyance executed by Isabel Miranda (Exh. B) in favor of
petitioner, the same was a voluntary transaction and hence needed no
court order for its registration.

In September 1955 the heirs of Crispina Miranda, Paulino and
Felicisima Castrillo, now petitioners, signed a deed of partition of
that portion of lot No. 188 (containing 505 square meters) still
registered in the said decedent’s name. As a result transfer
certificate of title No. 8418 was cancelled and in lieu thereof
certificate No. 9178 (Laguna) was issued, with the two petitioners
appearing as owners of 252 1/2 square meters each and the
Garcias—mother and son—of 85 square meters.

On March 14, 1956 Doroleo Dimaranan and his wife commenced the
present action to have themselves declared as owners pro-indiviso of a
1/3 share of lot No, 188, or 196 2/3 square meters; to compel the
defendants, the Castrillos and the Garcias, to execute the
corresponding deed of conveyance in their favor; to obtain the
cancellation of the existing certificate of title and the issuance of a
new one with their names entered therein; and to recover damages.

One of the defenses raised by said defendants, and reiterated before
us now as sole ground for review by petitioners Paulino and Felicisma
Castrillo, is that the action was barred by the statute of limitations.
The trial court decided in favor of the plaintiffs therein on November
2, 1956. The judgment was affirmed by the Court of Appeals and is
reproduced textually in its decision.

Petitioners assign only one error, namely:

“The Court of Appeals erred in applying Article 1434
of the New Civil Code in the instant case as respondents’ cause of
action under either Exhibits “A”, “B, or “C”, all cited in the
complaint for reconveyance, dated May 12, 1924, August 10, 1932, and
March 9, 1934, respectively, has prescribed long1 before the
effectivity of the New Civil Code.”

Petitioners contend that respondents’ cause of action arose from the
documents identified as Exhibits A, B, and C, which were executed in
1924, 1932 and 1934, respectively; and that the period during which the
action could have been filed was ten years thereafter, or until Eti
1944 at the latest, pursuant to section 40 of the Code of Civil
Procedure (Act 190), which was the law on prescription in force prior
to the effectivity of the new Civil Code in 1950.

The contention assumes that the action is “for the recovery of title
to or possession of real property.” The allegations in the complaint,
however, show that it is neither for recovery of title nor for recovery
of possession, because respondents became the owners of a 1/3 share
pro-indiviso, of lot No. 188 in 1982 when Isabel Miranda sold it to
them and as such owners entered into actual possession of the northern
portion of the lot and have continued in possession since then. The
only object of their action, aside from the recovery of damages, is to
obtain a deed of conveyance from the defendants below so that the fact
of their ownership may be inscribed in the corresponding certificate of
title. This kind of action, in fact, was expressly excepted from the
operation of the statute of limitations in the Code of Civil Procedure,
Section which states that “this chapter shall not apply an action by
the vendee of real property in possession thereof to obtain the
conveyance of it.”

The Court of Appeals applied the principle of estoppel in this case, specifically Article 1434. of the Civil Code, which reads:

“Art. 1434. When a person who is not the owner of a
thing sells and alienates and delivers it, and later the seller or
grantor acquires title thereto, such title passes by operation of law
to the buyer or grantee.”

In applying the foregoing provision the Court of Appeals proceeded
on the hypothetical assumption that when Isabel Miranda sold her 1/3
share of lot No. 188 to Doroteo Dimaranan in 1932 she was not yet the
owner thereof, and that she acquired ownership only when her sister
Crispina executed a formal deed of sale in her favor in 1934, covering
an area of 252 square meters.

Petitioners assail the application of Article 1434 for the reason
that this is a provision embodied for the first time in the new Civil
Code, and hence cannot be given effect retroactively, especially as it
would impair certain vested rights of petitioners.

In the first place, the principle of estoppel expressed in statutory
form for the first time in the new Civil Code is not really an
innovation. It has its origin in equity and, being based on moral right
and natural justice, finds applicability wherever and whenever the
special circumstances of a case so demand. (Mirasol v. Municipality of
Tarlac, 43 Phil. 601). In fact it has been applied by this Court in the
case of Llacer v. Mufioz, et al. (12 Phil. 328), as long ago as 1908.

In the second place, if anybody at all may be heard to challenge the
application of the doctrine of estoppel in favor of respondents, it is
only the party against whom it may be invoked—in this case the vendor,
Isabel Miranda, from whom they acquired the disputed property. Crispina
Miranda having conveyed the same to Isabel, neither she nor her
successors may raise the point to their own advantage. For them to do
so would in effect be to deny the rights of Isabel Miranda herself,
acquired by virtue of the two documents executed by Crispina in her
favor, one in 1929 (Exh. A) and the other in 1934 (Exb. C). This,
obviously, petitioners cannot be permitted to do.

This case presents still another aspect. When Crispina Miranda
executed the affidavit marked Exhibit A in 1929, affirming the fact
that lot No. 188 was owned not only by her but also by her two sisters,
she recognized the existence of a co-ownership between them. It did not
matter that the certificate of title was in Crispina’s name alone.
Co-ownership is a form of trust and every co-owner is a trustee for the
others. Thus, as a general rule, no one of them may acquire exclusive
ownership of the common property through prescription, for possession
by one trustee alone is not deemed adverse to the rest.

When respondent Doroteo Dimaranan acquired Isabel Miranda’s 1/3
share in 1932 (Exh. B) he substituted her in the co-ownership. As found
by the trial court and affirmed by the Court of Appeals, Doroteo at
first rented out the house left by Isabel, then demolished it and
thereafter planted the land to bananas, gathering the produce up to
1953. In other words, he was a co-owner in possession of his share, no
formal partition having yet been made.

After the death of Crispina Miranda in 1935, her heirs the
Castrillos, petitioners here, succeeded her in the co-ownership. They
acquired no right greater than what their predecessor had and certainly
none in derogation of those of the other co-owners. The latter did, not
have to resort to court action to make their rights effective: they
were in possession of their respective shares and as far as the
certificate of title in Crispina’s name was concerned, it was impressed
with a fiduciary character even in the hands of herein petitioners,
they being her heirs and privies and not third persons within the
meaning of the law.

Respondents’ cause of action accrued only in 1955, when petitioners
executed a deed of partition and on the strength thereof obtained the
cancellation of the title in the name of Crispina and the issuance of a
new one where in they appear as the new owners of 252 1/2 square meters
each, thereby in effect denying or repudiating the ownership of
respondent Dimaranan over his 1/3 share in the entire lot. It was only
then that the statute of limitations started to run for purposes of the
action instituted by him and by his wife for a declaration of the
existence of the co-ownership and of their rights thereunder.

The decision appealed from is affirmed, with costs against petitioners-appellants.

Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Reyes J. B. L., Barrera, Paredes, Dizon and Regala, JJ., concur.
Padilla, J., took no part.